Striking Returns for Long-Lived CEOs

 | Feb 15, 2013 | 10:00 AM EST  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

hcsg

,

wso

,

cmtl

,

jjsf

The resignation of Pope Benedict XVI got me thinking about the issue of people who linger for years at the top of organizations, including corporations. Is long tenure at the top a good thing or a bad thing?

Based on a quick study I did this week on long-tenured CEOs, I would say it's indeed beneficial to returns. Here is a list of 10 chief executives who have been in office for 35 years or more, along with the year they started.

Long-Lived CEOs

On Bloomberg, I looked up the total return for each of these stocks in the 10 years through Jan. 31, 2013, including reinvested dividends. The results speak well for long-lived CEOs. On average these companies returned 377% in the past decade, compared with 114% for the S&P 500 -- and, individually, seven of the 10 outperformed the benchmark for the 10-year period.

The biggest winner was Healthcare Services (HCSG), where Daniel McCartney has been at the helm for 35 years. The Bensalem, Pa., company provides housekeeping, laundry and linen to hospitals, nursing homes and other healthcare facilities. Its stock was up 1,118% for the 10 years ended January.

Watsco (WSO) was next with a 580% return. Based in Coconut Grove, Fla., the company distributes heating, air conditioning and refrigeration equipment. Albert Nahmad has been CEO since 1973. Two other companies posted returns of more than 400%: Comtech (CMTL), which returned 481%, and J&J Snack Foods (JJSF), which provided a 458% return.

One company, Tootsie Roll (TR), was up 46% but trailed behind the S&P 500, and just two of the 10 companies were down for the decade. Forest Labs (FRX) came in at negative 30%, and Scholastic (SCHL) lost 11% of its value.

So let's hear it for longevity at the top. If any readers have their own additions to the list of long-tenured CEOs, I would welcome them -- I may someday do a second iteration of this study.

John Dorfman is chairman of Thunderstorm Capital LLC, a money management firm in Boston. He can be reached via email here.

Columnist Conversations

Heidrick & Struggles (HSII) posted better than expected numbers. The shares popped early, fell back to neu...
Panera Bread (PNRA) is due to report and had been hitting new 52-week lows recently. PNRA shares are up about...
TSLA is trading $226.87, up 0.9% with IV30™ up 0.5%. This is an earnings preview, volatility and stock n...
Lang:
Going to be some big fireworks this week but we got it kick-started yesterday with some calls on WYNN, managin...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.